By Doug Smith, The Charlotte Observer

For the first time in seven years, Charlotte's tallest skyscraper is turning on the vacancy sign.

The 60-story Bank of America Corporate Center at The Square has about 150,000 square feet available for lease, mainly between floors 37 and 43.

That's a curious paradox in a countywide commercial leasing market beginning to recover from a two-year lull.

Karnes Research Co., which tracks Charlotte real estate, said the countywide office vacancy rate rose from 14.2 percent in the fourth quarter of 2002 to 14.6 percent in the first quarter of 2003 -- the highest since 1993.

Office vacancy rates peaked at 17.9 percent in the early 1990s recession.

In the center city during the first quarter, tenants moved into nearly 50,000 more square feet than they vacated -- an indicator that activity is picking up, said Karnes Research analyst Andrew Jenkins.

"We are definitely seeing an improvement in economic conditions -- if interest in leasing space is any indication," said Lincoln Harris senior vice president Adam Colvin. "I'm getting more calls now than I was getting two months ago."

Lincoln Harris, a real estate services firm, manages and leases about 5 million square feet of Bank America-owned buildings in Charlotte, including the corporate center, the 46-story Hearst Tower and the 30-story IJL Financial Center.

Real estate watchers say most of the leasing activity in recent months has come from within the market as existing tenants expand, customize their space and negotiate better rates.

"We have been able to expand and renew several tenants in Bank of America Corporate Center and Hearst Tower and are now beginning to hear from new tenants interested in these buildings," Colvin said.

Space is available in the corporate center mainly because Kennedy Covington, a law firm, moved to the top seven floors of the new Hearst Tower last year, and Grant Thornton, an accounting firm, moved this week to the 25th and 26th floors of the 27-story Charlotte Plaza Building.

Having that much space to fill might appear negative for the corporate center, but Colvin can see the positive side.

"Not long ago, the knock on Charlotte was there were no large blocks of contiguous space available," he said.

Being able to show large amounts of space for lease is important, business recruiters say, because many corporations won't wait for new construction.

Lincoln Harris recently hired Johnny Rankin, formerly with Trammell Crow Co., to assist Colvin in leasing and marketing the Bank of America portfolio.

They've been showing the corporate center space and making proposals to prospective tenants, Colvin said.

He said the vacancy amounts to less than 15 percent of the 11-year-old building's 1.1-million square feet of office space.

Center city landlords have been making lease deals with tenants that include free rent for several months and generous assistance with remodeling costs.

Lincoln Harris isn't advertising Bank of America's lease terms at the corporate center. "We understand the marketplace, and we will be competitive within that marketplace," Colvin said.

During the fourth quarter of 2002, the uptown office lease rates averaged $22.58 a square foot, according to Karnes Research.

In the Hearst Tower, the city's second-tallest skyscraper, about 34,000 square feet (including one full floor) of the 960,000 square feet of office space remains available, Colvin said.